BORROWING

New Zealand Herald, Volume LXXIII, Issue 22517, 7 September 1936, Page 12

BORROWING

I Sir.—l have not been discussing the ; question whether we should in future | borrow externally, but the repeated j assertions of Mr. Savage that our i Governments have, in the past, been | guilty of folly and even madness in. ! borrowing from other communities : when they could, by issuing additional | money, created by have secured the same result, without incurring debt. I have tried to show that a million borrowed abroad gives us, without effort, goods of that value, while money printed here would give us nothing of the kind. I have also tried to show that there is no difference between the money we obtain in Britain by borrowing and the money we obtain in Britain by the sale of our exports, and that therefore money printed here could no more be a substitute for the one than it could be a substitute for the other. Has Mr. Gatenby shown where I Mas wrong? Mr. Gatenby says our financial system is un-social and anti-Christian, because it "perpetuates our debt." Can he tell us plainly how he justifies that statement? When we borrow a million the lenders lose the goods of that value they could have purchased; we, on our part, gain goods of that value; goods of our own choosing, and without effort or sacrifice. Will Mr. Gatenby say it is anti-Christian to return the equivalent of those goods? We pay interest in recognition of the advantage we receive from the use of the equipment we purchased, or ought to have purchased, with our loan. Will Mr. Gatenby deny that modern machinery and equipment give an advantage to labour? Will he deny that he has, in common with other currency reformers, claimed again and again that modern equipment gives a wonderful, even a fabulous, advantage to labour? The borrower obtains, without effort, the power to purchase, up to the value of his loan, any of this modern equipment that is on the market, while the lender, for the term of the loan, loses that right. Can Mr. Gatenby tell us in plain language how it is un-social and antiChristian to make a charge for the advantage—said to be so fabulous — that is thus, for a term, transferred from lender to borrower? Manurewa. J. Johnstone.